Follow this author to personalize your feed and get instant alerts. Follow Go to your personalized feed WHY FOLLOW? Smart Alerts: Get notified about major news as it happens. Bank of America chief technology and information officer Hari Gopalkrishnan can easily list the benefits that the banking giant has seen from rolling out AI: its virtual assistant, Erica, has answered billions of customer questions. Fraud losses are down significantly.

Erica, which was launched in 2018, garnered 1 billion client interactions and has helped 32 million users. Bank of America expects Erica, early next year, to connect clients to banking agents regarding new products and services, such as mortgages, credit cards and deposit accounts. The pandemic saw a growing number of older customers use digital banking tools, including Erica, Gopalkrishnan said. The bank now wants to build on enhanced adoption by improving the flow of transactions, including the seamless handoff from Erica to human agents and vice versa. "We realized, at some point, people go, 'I'm done with that chat, I need to talk to a human,'" Gopalkrishnan said.

While big tech companies might not face regulation of their artificial-intelligence efforts in the US, banks trying to use AI still have to contend with reams of industry-specific rules, including laws ensuring equal treatment of customers. According to Bank of America technology executive Hari Gopalkrishnan, that's a problem for banks interested in using deep learning, the technology responsible for the current AI boom. That's because the decisions made by deep learning can be difficult to interpret--the "why" behind everything the algorithm does is a bit of a mystery. In banking, "[w]e're not fans of lack of transparency and black boxes, where the answer is just'yes' or'no,'" Gopalkrishnan said at a company tech summit. "We want to understand how the decision is made, so that we can stand behind it and say that we're not disfavoring someone."

The bank joins several organizations, ranging from the research arm of the U.S. Department of Defense to Uber Technologies Inc. and Capital One Financial Corp., that are grappling with the opaque nature of advanced AI algorithms. It recently announced they're working with Harvard University to address topics such as bias in algorithms. "We're not fans of lack of transparency and black boxes, where the answer is just'yes' or'no,'" said Hari Gopalkrishnan, client-facing platforms technology executive at Bank of America. Mr. Gopalkrishnan spoke about the bank's interest in artificial intelligence at Bank of America's Tech Summit, hosted Thursday at enterprise technology venture capital fund Work-Bench. The bank currently uses analytic models to help employees detect fraud and, for the past few months, has been studying how artificial intelligence could further improve the detection rate, he said.

Bank of America spends $3 billion developing and buying technology every year, and about three times that on keeping its existing IT infrastructure going, says David Reilly, global banking and markets technology chief information officer. As you might expect, some of that goes to artificial intelligence technology. The bank does not disclose how much. Speaking on Thursday at the bank's NYC Technology Summit, Reilly and other executives shared some of their experiences with AI and some of their concerns about it. Bank of America's chatbot, erica, which is currently available in 10 states, uses two forms of AI: natural language processing to understand speech, text and intent, as well as machine learning to glean insights from customer data that can be turned into advice and recommendations.

The most basic form of competitive analysis is to examine what other companies in your field are doing to meet the needs of customers. While that effort certainly remains relevant, when it comes to online and mobile experiences it's important to remember that your customers are likely comparing your offerings to those of digital-first organizations operating in completely different industries. This is top of mind for technology professionals at Bank of America Merrill Lynch (BofAML), which has tripled its digital budget in 2016. "Our customers don't benchmark us against banks," said Hari Gopalkrishnan, CIO of client-facing platform technology, in an interview with InformationWeek. We spoke with Gopalkrishnan and other BofAML technology executives during the company's 8th Annual Technology Innovation Summit in Menlo Park, Calif., October 19 and 20.